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How to Salvage a Continuous Improvement Implementation in a Unionized Plant

Any manager who has worked in a unionized environment can tell you that it presents its own entirely unique set of challenges; aside from running the day to day business. A union, in its very nature, promotes stability and thwarts the types of changes that are sometimes essential for a continuous improvement implementation such as Lean Six Sigma or other. In a typical non-union environment, a comprehensive CI implementation takes anywhere from 2.5 – 5 years. In a union environment, you can expect this duration to be a bit longer; ranging from 3.5 to 7 years. Also the chances of failure are significantly greater in a unionized environment because of the duration and perceived conflict of interest for the union. However, there are a few strategic approaches that should be artfully employed in any improvement initiative; each of which is designed to leverage the very nature of the environment:

1) Focus initially on non-direct labor waste reduction. This includes material, energy, overhead or other. Any talk of direct labor or hours reduction will raise immediate red flags in a union and the most vocal members will quickly poison the well on your initiative. Focus instead on reducing material or energy waste in the onset and engage union authoritative figures in leading / executing the projects. Most employees generally want to see the company save money but not at their personal expense. Engaging the union leaders will send an early signal that this initiative is “safe” and will reduce resistance levels. Use these early wins to generate momentum behind the initiative.

2) Make the goal of the initiative to drive up efficiency. This could be positioned as “we are expecting business from several new customers and need to increase our capacity / throughput without significantly changing our asset footprint”. Set up your KPI’s to show productivity levels during scheduled time and not total time. This means if the line was scheduled for 6 hours and employees were on the clock for 8 hours, show productivity against the scheduled 6 hours. Keep a backlog of additional value-added work for the additional hours created. This way, you can use your continuous improvement initiative to drive for greater efficiency within the scheduled time. If you don’t actually have a burning platform, you may need to create an artificial sense of urgency to get better. Without this pressure to get better, it will be difficult to make the case for becoming more lean. People will make every excuse for why you should not try something different, which will only stagnate your growth. If you will be purchasing new equipment, leverage these acquisitions to show your own commitment to becoming more efficient. Just about everyone loves new toys in the factory. Over time, attrition will occur and openings can be evaluated for necessity to right-size the workforce over time. This may also mean that you won’t see some of the financial benefits from efficiency gains right away. You need to have a little faith that the gains will come as long as you stick with it.

3) People in the union are no different from everyone else in two regards: they want more time and more money to use to their liking. A lesson from Freakonomics, people’s behavior tends toward the most favorable incentives and away from disincentives. A huge part of any improvement initiative will require significant behavior changes so any effective change agent will need to be psychologically savvy to get people to break old habits. If people smell that engaging in CI will mean less money in their pockets, they will resist. If you set up your CI incentives to put more money in people’s pockets and / or allow them more free time (without losing pay), the critical mass toward CI activity will be leveraged in your favor as the change agent. Read my earlier blog post on Value-based compensation for some great ideas on how daily compensation could be set up to reflect actual value contribution instead of hours on the clock.

Implementing continuous improvement in a union environment is a challenging job but can certainly be done. The fundamental benchmarks are the same but the pace can be reduced significantly. Union plants are a lot less agile in many ways because many practices are regulated by stringent contracts, which can definitely slow the rate of change. However, by recognizing the leverage points (such as very high expertise) and pitfalls, you can craft a powerful strategy for a bullet-proof continuous improvement implementation. The manufacturing efficiency experts at Manuficient can help you develop and implement this strategy and put your factory on the road to success.